The Reserve Bank of India (RBI) Governor, Raghuram Rajan on Thursday reiterated that persisting inflation is a major concern and it has to be contained.
“The real problem is inflation that is persistent. We have been emphasising again and again in order to break the back of inflation, we got to break this persistence,” said Dr. Rajan while addressing the 8th Statistics Day Conference here.
He said that once inflation is contained, the RBI will be in a much more comfortable position. According to Dr. Rajan in the last few years, food inflation has been the most significant aspect of inflation and that there may be a link between Minimum Support Price (MSP) and inflation.
The central bank is also working on a producer price index, said Dr. Rajan. “We still don’t have a proper producer price index. It is extremely important to understand the differences between retail and wholesale prices. Those are things to worry about. We are trying to get this data and hope to receive it relatively soon,”
Further he said that there is a need to improve the quality, quantity and timeliness of GDP data. “We need to improve the quality, quantity and scope of our data. We are working on it. We certainly need timely information on employment… We need to get comprehensive data perhaps at a monthly level… In many other countries, the employment data forms the basis for a number of decisions on the monetary policy,” said Dr. Rajan.
Construction sectorDr. Rajan said it is important to get data on construction sector as quickly, capture and get comprehensive data on consumption.
